A SKY high row is blazing after a massive deal to sell equity in Manchester Airport which is part owned by Wigan Council.
The Styal-based air group - owned by the council and the other nine local authorities in Greater Manchester - has struck a £1bn deal with Australian investors paving the way for a swoop on Stansted airport.
Industry Funds Management has won the contest to buy a 35 per cent stake in the group, which also runs Bournemouth and East Midlands airports.
And the windfall deal will now lay the foundations for a takeover of Stansted, which competition watchdogs have ordered current owner BAA to sell off.
Under the deal - which is conditional on the Stansted takeover going ahead - largest shareholder Manchester Council would reduce its share from 55 per cent to 35 per cent, with Wigan and the remaining councils jointly owning a 30 per cent stake, down from 45 per cent.
Wigan Council Leader Lord Smith said that the proposal would help to guarantee that the airport continued to provide the borough with a £1m-plus annual dividend which can plough into services.
But Coun Jim Ellis said: “Since when has the ownership and purchase of airports been a front line service for the people of Wigan?”
A joint statement from Manchester Airports Group and the Association of Greater Manchester Authorities - also chaired by Lord Smith - said: “Manchester Airports Group is aiming high to strengthen its position as one of the leading airport operators in the country.
“Following a strategic review of the group’s performance and future prospect, MAG is pursuing two key recommendations: one to explore the opportunity to add a quality airport to the group and the other to bring in an equity investment.”
Lord Smith explained that Wigan has a five per cent minority share holding in the airport and the deal would strengthen the company and enable them to keep paying a dividend which in the last financial year was worth more than £1m to Wigan to reinvest in services.
He said: “Manchester Airport is planning to deliver a better deal for its current shareholders including Wigan by expanding its activities without a cost to them. If successful Wigan would benefit from increased dividends in the future.”
“Wigan is not involved in buying airports but is strengthening the financial position of Manchester Airport.
“After careful consideration backed by professional advisors, the shareholders of Manchester Airport have agreed to expand the capital available for the business to invest. This will strengthen the company financially and allow it to continue to pay the substantial annual dividend to its shareholders. Wigan Council already uses this to support local services and will be able to do so for years to come.
“Local people are proud of their airport as it not only means that they can conveniently access the world but also supports jobs in the area.”
But Coun Ellis said: “I think that the people of Wigan will find it outrageous that the 10 councils including the Metro are prepared to sell for what is a non-beneficial foray into further airport ownership.
“If the sale goes ahead dividends from the airport will reduce by one third leaving the 10 councils taking a similar cut in the income.
“Is this one of the reasons for a further cut in staff to pay for the council’s profligacy and loss of income? At the very least a portion of this could save Hindley swimming pool and other facilities, most of which are regarded by the public as front line services, under threat of closure.”